An Israeli government spokesman has told Sky News a ceasefire with Gaza militants is "not there yet".

Hamas official Ayman Taha said earlier that an Egyptian-brokered truce had been finalised and would take effect from 10pm UK time.

But spokesman for Israeli Prime Minister Benjamin Netanyahu Mark Regev said the announcement of a ceasefire was premature and Israeli military operations in Gaza would continue in parallel with diplomacy.

Mr Regev would not give any details of the discussions but told Sky News Israel wants a long-term resolution and does not want to just give Hamas a "time out to lick its wounds".

Hamas' Ezzat al Rishq said the truce had been held up because Israel had not responded to the proposals and it was confirmed there would be no announcement from Cairo on Tuesday.

Israeli homeowners inspect damage after a rocket attack in Beersheba

US Secretary of State Hillary Clinton met Mr Netanyahu in Jerusalem and pledged her continued support to Israel and praised its Iron Dome defence system.

She also offered her sympathy to those affected by the rocket attacks: "Our hearts break for the loss of every civilian; Israeli and Palestinian.

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Gallery: Gaza Conflict: Latest Pictures

A picture taken from the southern Israeli border with the Gaza Strip shows Israeli artillery flares illuminating the Palestinian coastal enclave.

"In the end there is no substitute for security and for a just and lasting peace," she added.

President Barack Obama phoned Egyptian President Mohamed Morsi for a third time in 24 hours to commend him on his efforts to ease the tensions.

Speaking during talks with the UN secretary general Ban Ki-Moon in Jerusalem, Mr Netanyahu said his country would be a "willing partner" in a long-term solution to the conflict.

He reiterated that Israel will not tolerate rocket attacks on its cities and people but said he wanted to work towards a diplomatic resolution.

The Israeli military said an 18-year-old soldier was killed in a rocket attack on southern Israel.

Video:Netanyahu On Long-Term Solution

It was the military's first fatality since it launched an offensive in the Gaza Strip last Wednesday.

At least 130 people have been killed in Gaza, including around 31 children, and at least five Israelis are also dead as the conflict continues.

Mr Ban said his "paramount concern" is for all civilians, both in Israel and Gaza and urged strong caution against an Israeli ground offensive.

"Further escalation would be dangerous and tragic for the entire region," he added.

In a press conference with Mr Ban later, Israel's President Shimon Peres said he would prefer to deal with Gaza by "talking and not shooting" but added that the defence forces were "extremely careful not to hit civilian life".

Video:Israel: Hamas Must End This

"Hamas opened it, Hamas can end it," he added.

Six Palestinian men accused of being spies for Israel were executed at an intersection in Gaza, just hours after Mr Ban called for a halt to the conflict during talks in Cairo with the Arab League chief Nabil Elaraby.

Witnesses said the six men were dragged out of a van and forced to lie down in the street before they were shot by masked gunmen.

Sky News chief correspondent Stuart Ramsay, reporting from Gaza, said: "We understand six men were taken into a square ... and were executed in front of crowds."

It has been reported that five of the bodies lay in a pile as a mob stomped and spit on them. A sixth body was tied to a motorcycle and dragged through the streets as people screamed, "Spy! Spy!"

Video:Ban Ki-moon Gaza Ceasefire Call

The Hamas military wing has claimed responsibility for the executions.

Earlier Israel's air force dropped leaflets across areas of Gaza City urging people to evacuate their homes "immediately".

"For your own safety, you are required to immediately evacuate your homes and move toward Gaza City centre," the one-page Arabic-language leaflet said.

Sky's Sam Kiley said the leaflet drop could be part of a propaganda exercise to show Hamas that Israel is seriously considering an imminent ground invasion.

Meanwhile a man identified as the most elusive top Hamas commander, and a founder of its military wing, has urged the group's fighters to keep up attacks on Israel.

Video:Israel 'Precision' Strike Video

Mohammed Deif, seriously wounded in an Israeli airstrike in 2003, reportedly said on Hamas-run radio that fighters "must invest all resources to uproot this aggressor from our land".

Foreign Secretary William Hague told the Commons: "We have made clear that Hamas must bear primary responsibility for the start of the current crisis but also that all side have responsibilities."

"We quickly called on Israel to seek every opportunity to deescalate their military response and to observe international humanitarian law and avoid civilian casualties."